Bitcoin’s face-melting rally could be coming to an end as analysts look at potential market corrections. However, most agree that momentum and sentiment are positive, and the trend is upward.
On December 5, Glassnode analyst “Checkmate” commented on the potential market pullback, stating, “I’d be surprised if Bitcoin didn’t consolidate [or] correct near term.”
Crypto Correction Imminent?
The analyst added that a few months’ rest “would allow investor cost bases to re-acclimate above the True Market Mean Price.”
He also said that the market hasn’t given back more than 20% so far this year, “which suggests persistent and strong spot demand.”
The previous bull market saw drawdowns exceeding 60%, but this has yet to happen in this bull cycle.
It should be noted that these are bull market corrections and not bear market bottoms, which are often more than 80% down from the previous peak.
JRNY Crypto reminded his 767K X followers of a big crash/correction before the last bull market.
“Things are moving quick in the Crypto market right now, but just remember we had a similar run in 2019 that was followed by one of the worst crashes I’ve seen just before the last Bitcoin Halving.”
However, the big crash mentioned was due to the global market meltdown and the black swan event caused by Covid lockdowns in March 2020.
“I wouldn’t be surprised to see at least one more market correction before the real bull market starts,” he added.
This time around, there is a lot of geopolitical tension and economic uncertainty to deal with, so the bulls may not be ready to charge yet.
Trader Justin Bennett concluded that the last two bear markets ended with a second capitulation. “Don’t rule out a $25k liquidity sweep,” he added.
Markets in Retreat
Bitcoin has remained steady at $41,600 without gaining much more today. As a result, total capitalization has remained at around $1.61 trillion.
However, altcoins are already beginning to retreat, the majority of them seeing red during the Tuesday Asian trading session.
Most of the high-cap altcoins had fallen between 1 and 3 percent on the day. Nevertheless, some were taking a bigger hit, such as Solana dumping 7.2% and Chainlink dropping 5.8%.
Moreover, altcoin markets have lagged behind Bitcoin during this rally and have only reached resistance after 18 months of consolidation.